Earnings soar at EG Group as expansion strategy continues

EG Group co-CEOs Mohsin, left, and Zuber Issa

EG Group, the Blackburn-based international forecourts business, has posted a 48% boost in EBITDA, despite lower revenues for the year to December 31, 2020.

The group, which announced a £6.8bn deal to buy Leeds-based supermarket giant Asda last October, revealed EBITDA of £1.272bn, compared with £860m in 2019.

Total revenues for the year were £20.687bn, down 7.6% on the previous year’s £22.386bn. However, the group cautioned that its revenue is heavily impacted by wholesale fuel prices, which are outside the group’s control.

Net debt reduced from £9.069bn to £8.974bn.

On December 14, 2020, EG Group announced that it has agreed to acquire a network of 286 petrol station forecourts in Southern Germany from OMV Deutschland GmbH, for €485m.

The transaction is expected to close in the second half of 2021, subject to regulatory approvals.

Following the reporting period, on February 3, 2021, the group announced that it has agreed to acquire certain assets of Asda, comprising its petrol filling stations, car washes and ancillary land, for a headline enterprise value of £750m.

The transaction is currently expected to close in the second quarter of 2021, subject to regulatory approvals.

Following a reduction in the capital investment programme in response to the COVID-19 pandemic in the first half of 2020, the group recommenced investment programmes through the second half, with growth capital expenditure of $294m for the full year, including $124m in the fourth quarter.

The group had available liquidity headroom of $1.284bn at December 2020, and it said it intends to raise up to $1.8bn of new senior secured and junior debt, principally to finance the OMV Germany and Asda Forecourts acquisitions, subject to regulatory clearance of both transactions.

Earlier this week the group announced it had appointed Dame Alison Carnwath as a non-executive director and chair of the audit committee, with effect from March 1.

Among the companies she has worked with are BP, Friends Provident, Gallaher, Barclays and Man Group. She is currently chair of the audit committee at Zurich Insurance and BASF and a non-executive at Paccar, a Fortune 500 company listed on NASDAQ.

It follows the appointment of former Marks & Spencer CEO, Lord Stuart Rose, as chairman last month.

Mohsin Issa, co-founder and co-CEO of EG Group, said: “I am incredibly proud of EG’s strong performance in 2020, which is testament to the incredible dedication of our colleagues around the world, and demonstrates the resilience and diversification of our best-in-class business model.

“Despite the continued, unprecedented challenges of the COVID-19 pandemic, we have continued to provide an essential service to millions of customers in our global communities, while also delivering continued growth in our profitability.

“At the same time, the group has continued to take significant and proactive steps forward in its longer term development. These include the recently announced OMV Germany and Asda forecourts acquisitions, which will further strengthen EG’s position in two of our key markets, as well as the additional board and leadership appointments that we have announced this week.

“These appointments further demonstrate the group’s commitment to implementing best practice in corporate governance, and will help us to deliver on the significant growth opportunities that lie ahead.”

EG Group currently employs more than 44,000 staff working in more than 6,000 sites across Europe, USA and Australia.

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